( June 10, 2014, New Delhi, Sri Lanka Guardian) The decision of Prime Minister Narendra Modi to invite leaders of the South Asian Association of Regional Cooperation (SAARC) for the swearing-in ceremony of the new government makes a great beginning, underscoring the resolve of the new government to embed India firmly within the South Asian regional matrix. The fact that all of India's neighbours in South Asia and the wider Asian region have reached out to Modi also augurs well for the new government.

Pakistan will remain a major challenge for the new government. The civil-military divide continues to be a significant factor in shaping Islamabad's foreign policy and in particular its approach towards India. New Delhi remains far from convinced that the Nawaz Sharif government is either willing or able to make a decisive positive move towards India. The decision to grant India the Most Favoured Nation (MFN) status remains stuck while the rhetoric on Kashmir has become shrill in recent months.

Pakistan had for some time recognised the futility of engaging with the lame duck Manmohan Singh government in Delhi and had been waiting for the new government to take over. Many in Pakistan have suggested that a strong Modi government will provide an opportunity to achieve a long lasting settlement with India. After Modi's election, the Pakistani government has been quick to put the ball back in the new Indian government's court, suggesting that it is up to the new government to make the first move.

The BJP has indicated that high-level talks with Pakistan would proceed only if some basic conditions are met, especially those pertaining to bringing to justice the masterminds behind the Mumbai terror attacks and curbing terror emanating from Paksitani soil. How this rhetoric gets operationalised into actual policy remains to be seen but by inviting the Pakistani Prime Minister to his swearing-in ceremony, Modi managed to successfully regain the initiative.

Bangladesh has also welcomed the arrival of the Modi-led Bharatiya Janata Party (BJP) to the helm of the Indian polity. Bangaldesh's Prime Minister, Sheikh Hasina, in her congratulatory message to Modi suggested that he should make Dhaka his first destination abroad. There is considerable merit in the suggestion. Hasina has been a valuable partner for India over the last few years but the United Progressive Alliance (UPA), under pressure from the Mamta Banerjee-led government in West Bengal, was not able to deliver on some key issues which Dhaka feels strongly about.

Sheikh Hasina has taken great political risk to put momentum back in bilateral ties. But there has been no serious attempt on India's part to settle outstanding issues. Bureaucratic inertia and lack of political will have prevented many of the deals in getting followed through. Dhaka is seeking an expeditious Indian response to its demand for the removal of the tariff and non-tariff barriers on Bangladeshi products. There has also been little movement on the boundary issue and on transit rights. India has failed to reciprocate fully to Hasina's overtures. The Modi government will have an opportunity to start with a clean slate and deliver on Indian promises to Bangladesh, thereby generating some trust in the relationship. A stable, moderate Bangladesh as a partner is in India's long-term interest. Constructive Indo-Bangladesh ties can be a major stabilising factor for the South Asian region as a whole.

Sri Lanka remains a difficult country for India. Colombo matters because the Indian Ocean matters. The 'great game' of this century will be played on the waters of the Indian Ocean. Though India's location gives it great operational advantages in the Indian Ocean, it is by no means certain that New Delhi is in a position to hold on to its geographic advantages.

China is rapidly catching up and its ties with Sri Lanka are aimed at expanding its profile in this crucial part of the world. Indian policymakers need to shape up soon or else they are in the danger of losing this 'game' for good. There is a new hope in Colombo that with Jayalalithaa's AIADMK not being part of the new coalition governing in Delhi, India will have an opportunity to stabilise its sputtering ties with Sri Lanka. However, the Modi government will need the AIADMK's support in the Rajya Sabha and that might continue to limit India's overtures to Sri Lanka.

Nepal continues to make its tentative journey towards democratic stability. With political and economic instability causing more uncertainty in recent years, India is viewed as part of the problem too involved in the domestic politics of the country. The political uncertainty in Nepal has flamed anti-India feelings and allowed China to enlarge its presence. The Himalayan kingdom is going through a crisis and India is being blamed for pulling strings from behind the scenes. It is this insecurity that Beijing has been able to exploit in Nepal to serve its own interests. The Nepalese polity, cutting across party lines, has welcomed the assumption of power by Narendra Modi, with most expressing the hope that Nepal would be a beneficiary of Modi's developmental agenda.

Afghanistan stands at a critical juncture in its political transition and it is also making its expectations known to India. The debate on what sort of security footprint India should have in Afghanistan has been going on for years in New Delhi and there has been no urgency in coming up with a coherent response. The bitter truth is that all the developmental investment that India has made will come to naught once the Western forces leave Afghanistan if India doesn't make it unequivocally clear that it intends to strongly protect and enhance its security interests even in the absence of the Western presence.

Afghan President Hamid Karzai has been hitting on the same theme during his recent India visits and indeed presented a "wish-list" to India on the sort of defence support he is seeking from New Delhi. The Modi government will have an opportunity to reshape the contours of India's Afghan policy at a time when Afghanistan is also undergoing political transition, providing new opportunities to both states.

For all the pretensions of being a global power, India has been steadily losing its profile as a credible South Asian state. It is now time to keep the focus firmly on South Asia and manage the multiple crises in the region. Because if New Delhi would seem disinterested, others will fill the vacuum and that would not always be to India's advantage.